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The Malaysian oil palm has seen steady progress. Started in Malaysia as an ornamental plant, it has turned into a huge industry. Oil palm production has yielded unlimited economic profits and is currently an emerging Malaysian economic sector. Malaysia currently accounts for an overwhelming contribution to the production and export of palm oil worldwide, which is 39% and 44%, respectively. From around 4.49 million hectares of land, a massive 17.73 million tons of palm oil and 2.13 tons of palm kernel oil were produced. It has been widely use as food products, cosmetics, livestock feed, as well as in bioenergy industry. This is in line with the fast-growing global demand for the palm oil products. Nevertheless, it is currently experiencing a period of slow or less growth in terms of contributing naturally to gross national productivity. Issues such as extreme weather, aging trees, and plant diseases are most prominent among the natural factors that are hindering the growth of the industry. The global pandemic of COVID-19 is also contributing to the current slow growth of palm oil sector. Malaysia has a crucial role to play in meeting the growing global need for oils and fats, as Malaysia is one of the palm oil and palm oil products' major producers and exporting countries.

The purpose of this paper is sixfold: first, to know the ability of area carrying capacity to the development of downstream oil palm industry; second, to know the potential for the development of downstream oil palm industry in efforts to improve the community through employment and business opportunities in the regions; third, to find eco-friendly institutional arrangement strategies of oil palm farming in order to spur economic growth and development; fourth, to formulate strategies for potential environmental impact as a result of institutional arrangement and development of downstream oil palm industry, both in regional and national scope; fifth, to predict the economic multiplier effect as impact of institutional arrangement and development of oil-palm-based downstream industry; and sixth, to include production centers and development areas of oil-palm-based downstream industry in potential areas.

Research location was in potential areas of oil palm plantation development, either in the form of plasma through state-owned enterprises (BUMN) and private-owned enterprises (BUMS), or in the form of self-supporting by community. The research locations were divided into two parts, namely the land area and the coastal area. The land area of Riau consisted of Kampar, Rokan Hulu and Kuantan Singingi Regency, while the coastal area of Riau consisted of Pelalawan, Siak, Bengkalis, Indragiri Hilir, Indragiri Hulu and Rokan Hilir Regency. Both research areas had different productivity which was caused by differences in soil fertility. The required data were primary and secondary data.

Plantation activities have increased the mobility of goods in the villages, causing plantation activities to also open business and employment opportunities for people who are able to accept these opportunities. Since post-1998 crisis, the growth of oil palm plantation area in Riau increased sharply, namely in 1998, the area of oil palm plantations was 901,276 ha, in 2012, 1,119,798 ha and increased to 2,103,175 ha at the end of 2017. Through economic activities that produce goods and services required during the plantation process and the development, downstream industries will have backward linkages. The development of oil palm plantations in Riau has had an impact on economic activities in rural areas. The result of the research in the field is that the average income of farmers in the plantation subsector (especially oil palm) is Rp4,576,696 per month or $5,781.09 per year. The impact on investment in the estate subsector has been felt by rural communities. This condition also affects the purchasing power of the people, resulting in the increase of mobility of goods and people. During the period 2009–2016, rural communities enjoyed a high level of prosperity. During this period, the price of fresh fruit bunch at the farm level was quite profitable. On the other hand, the production of the plantation area also increased compared to the previous period. The impact of rising prices and increasing production of farmers is that the farmers’ welfare index in the countryside had a positive value of 0.43. This index showed the increase of farmers’ welfare from the previous period by 43 percent.

There are few previous studies which have comprehensively and specifically reviewed the regional economic empowerment through institutional arrangement and development of oil-palm-based downstream industry. The development of oil palm plantations aims to eliminate poverty and underdevelopment, especially in rural areas. In addition, it also pays attention to equity. In broad sense, agricultural development which is based on plantations aims to improve the welfare of the community so that there is a change in the pattern of life of the surrounding community. On the other hand, the success of plantation development that is based on oil palm agribusiness is expected to reduce income inequality between community groups and between regions.

Global palm oil production is growing rapidly, especially in Southeast Asia, with Indonesia and Malaysia as the biggest producers. Despite significant contributions to these countries’ economies, environmental and social aspects continue to be debated within this industry. The sustainability strategy is very important for the palm oil industry. This study aims to explore the sustainability strategy using six elements, namely, stakeholder engagement, governance and leadership, sustainability view and the economic, environmental and social strategies of Indonesian and Malaysian palm oil companies.

This study observes 21 Indonesian palm oil companies and 44 Malaysian palm oil companies from 2014 to 2018 with a total observation of 280 firm years. The methodology used in this study is a qualitative content analysis of six themes based on the sustainability strategy elements, which was further developed into 40 indicators. Content analysis is carried out on information published in annual reports and sustainability reports.

The study results indicate that stakeholder engagement, governance and leadership and strategic view of the palm oil companies in Indonesia and Malaysia are still likely to be weak. Palm oil companies have not demonstrated their focus on implementing economic, environmental and social strategies. Although the results indicate that there is a greater emphasis on environmental and social strategies than on economic issues, attention to both issues is still very low.

Palm oil companies need to integrate sustainability strategies in their business models and communicate them well to stakeholders to increase their competitive advantage in the palm oil industry. The government also needs to issue stricter rules and incentives to encourage companies to implement sustainability strategies.

The study results provide implications for the communities around palm oil plantations to provide better social control so that companies can implement sustainability strategies in their business processes.

This study highlights the importance of sustainability practices integrated into palm oil companies’ business models, which have not been well implemented in the palm oil industry in the world’s largest producing countries.

The agriculture industry has a considerable impact on Malaysia’s economy, as seen by its contribution of roughly 8.2% of gross domestic product in 2018 and its potential to absorb 11.09% of Malaysian labor in the same year. This study aims to simulate rising output in a system model of sustainable and profitable crude palm oil (CPO) supply chain management (SCM) and to formulate policy solutions to build sustainable and profitable SCM of Malaysian CPO.

This research included both primary and secondary data. This study used the dynamic system model to simulate palm oil land expansion, replanting policies and environmentally friendly growing techniques.

This study’s findings suggest that the dynamic system model of Malaysia’s CPO’s sustainable and profitable SCM is valid when its structure and performance are tested. The fifth scenario provides the best results, with the most significant net benefit value compared to the other scenarios.

The ideal policy alternative is replanting sustainable agricultural practices without burning technologies during new land clearing to achieve the best net advantages.

The purpose of this paper is to develop strategies for potential environmental impacts as a result of institutional arrangement and development of oil palm downstream industry both regionally and nationally.

The research location is in the areas potential for oil palm plantation development, either by plasma through BUMN and BUMS or self-supporting by the society. The research location will be divided into two parts, namely, the land area and the coastal area. The Riau land areas are Regency of Kampar, Rokan Hulu, and Kuantan Singingi, while Riau coastal areas are Regency of Pelalawan, Siak, Bengkalis, Indragiri Hilir, Indragiri Hulu and Rokan Hilir. Both research areas have different productivity due to the different soil fertility levels. The sustainability level of oil palm plantation from the socio-economic and environmental aspects is analyzed using the multi-dimensional scaling approach modified into Rapid Appraisal-Index Sustainability of Palm Oil Management.

In Riau Province, the development of oil palm is quite rapid. This is reasonable for several reasons which include the following supporting factors: the geographical condition of the Riau region is very supportive; the high demand for palm oil derivative products; the existence of market guarantee for oil palm farmers; the higher income oil palm generates than other plantation crops; and the relatively flat area. Most of the problems faced by oil palm farmers are the use of less good seeds, the length of the fruit laying at the location of the plantation, the inadequate production road, the relatively far distance to palm oil mill (POM) (National Agency of Drug and Food Control), the tendency of determining the unilateral revenue of the POM, the collectively measurement of revenue and the general revenue information. The development of oil palm plantations has created an entrepreneurial capability for farmers who are able to capture business opportunities in the agricultural sector, especially the plantation sub-sector.

The originality of this paper shows the comprehensively control strategy, potential of environmental impact and palm oil plantation. The method used for data collection was rapid rural appraisal method because accurate information is needed in a limited time as it relates to decisions related to village development that must be taken immediately. The study area was conducted in Riau Province because Riau Province is one of the biggest palm oil producers in Indonesia. The study sites will be divided into two, namely, the land area and the coastal area.

This paper aims to present the development of palm oil sector and future challenge in Riau Province Indonesia, which includes sustainable plantation development.

This research was conducted through a survey with developmental research method. The research location is in the Province of Riau, which is the potential development of oil palm plantation. The land areas of Riau are Kampar, Rokan Hulu and Kuantan Singingi, while the coastal areas are Pelalawan, Siak, Bengkalis, Indragiri Hilir, Indragiri Hulu and Rokan Hilir. The socio-economic and environmental aspects of sustainability level of palm oil plantations were analyzed using a multi-dimensional scaling approach that was modified into a Rap-Insus-Pom.

Development of palmoil plantations results in land conversion, posing potential erosio. In anticipating environmental damage, the Government of Indonesia imposes the Indonesian Sustainable Palm Oil (ISPO) policy. The results of ISPO policy show that Indonesian crude palm oil products are environmentally friendly.

This research is one of few studies that investigate the development of palm oil sector and future challenge in Riau Province, Indonesia. Riau Province still needs 13 units of palm oil mills with capacity of 60 tons per hour. Find strategies to regulate palm oil farming institutions and derivative products to enhance growth and economic development in the region and find production centers and development areas for palm oil local industries in potential regions.

This study aims to construct models to classify independent smallholder farmers’ (ISFs) plantation suitability and its competitiveness index. It proposes the models with the objective to accommodate ISFs as the main source of raw material for the palm oil industry. It was predicted that the supply of oil palm fresh fruit bunch would depend on ISFs’ plantations due to the government policy that restricts the expansion of the plantations.

The study was designed using a geographic information system approach and analytical hierarchy process for mapping the suitability of smallholder farmers’ oil palm plantation in the Kampar Regency. The competitiveness index was measured using a modified Diamond Porter framework and competitiveness index quantification. The model was conducted on 177 respondents from five districts in Kampar Regency.

The results indicated that it mapped 128,936.759 hectares area of ISFs’ oil palm plantation in the Kampar Regency. The results of plantation suitability showed that only 13.88% of plantations owned by ISFs were potential, 71.21% of them were in the developing category and 14.91% of plantations were non-potential. The competitiveness index showed there were only 7.91% of them at the developed competitive position, 73.45% at developing a competitive position and 18.64% at the least-developed position.

The paper includes implications for developing ISFs’ capacity building and best practice management for oil palm optimization, resulting in bargaining positions and social well-being.

The study had succeeded to visualize ISFs’ plantation area suitability and competitiveness at Kampar Regency, Riau Province. The model provides a brisk understanding and valuable information about ISFs’ conditions spatially. It offers specific outcomes and becomes important in optimize and develop the existing plantations at the right time and exact location.

This paper sets out to report on a study of the Roundtable on Sustainable Palm Oil (RSPO) as an instance of “partnered governance” oriented to advance sustainable development in a supply chain. After briefly discussing the conceptualization of partnered governance, its social organizational features, and its drivers, the paper aims to outline the history and structure of RSPO and then to assess the effectiveness, efficiency and level of legitimation of this innovative governance structure. The paper points out several of the limitations as well as potentialities of partner governance arrangements such as that of RSPO.

The paper shows through a focused multi‐method case study how the RSPO developed as consumer‐oriented businesses partnered with civil society organizations and palm oil producers to address what was seen as a long‐term threat to rain forests, on the one hand, and to financial interests, on the other.

In the case of deforestation caused by oil palm expansion, national government intervention was absent and international regulation could not be mobilized. While the RSPO's system of partnered governance may have many shortcomings, the paper stresses that there are few real alternatives that have been as successful in addressing this type of sustainability issue. A major structural problem with such partnerships for sustainability is that their emergence and development typically depend on powerful players.

The originality/value of the paper lies in its identification of several of the strengths and weaknesses of partnered governance based on a focused case study, and suggests ways in which partnered governance can be developed and optimized in addressing sustainability issues.

The study aims to enhance our understanding of strategizing sustainable palm oil at company level and to bridge the gap between strategy formulation and implementation. In this case-based study, the way a food company is tackling the challenges faced during the promotion and incorporation of sustainable palm oil into core business strategy is explored. By taking a strategy-as-practice approach, this research sheds light on the microlevel activities and the role of formulated plans, implemented actions and engagement in activities.

An ethnographic case study was carried out using participant observation, semi-structured interviews, informal interviews and documentary review.

The findings demonstrate the complexity of implementing a sustainability strategy for a controversial commodity such as palm oil in supply chains. External pressure was one of the most important drivers for taking action regarding environmental and social sustainability issues. Moreover, formulating and implementing supply chain strategies for sustainable palm oil required effective communication and collaboration between different departments within the organization.

Although important insights were obtained through this six-month long ethnographic case study, additional valuable information could have been obtained if the research had been carried out for longer.

The paper includes implications for strategizing sustainability at company level from a strategy-as-practice perspective.

Through this study, a better understanding of the challenges faced from the downstream perspective in sustaining food supply chains can be obtained.

Palm oil has consistently been a staple ingredient in the Malaysian diet. Despite various promotional efforts throughout the years, the health aspects of palm oil have often been undervalued, leading consumers to overlook its benefits. This study has two objectives: (1) to explore consumer behaviour in purchasing decisions for food products containing palm oil in an emerging market and (2) to examine consumer awareness of palm oil as an ingredient in various edible products related to health.

A quantitative methodology that utilises a self-administered questionnaire was adopted for data collection. The conceptual framework and hypotheses were tested using partial least squares (PLS) structural equation modelling (SEM) on a dataset of 342 respondents.

The findings revealed that three hypotheses – attitude, subjective norms (SNs) and perceived health benefits – positively impact the intention to purchase palm-oil-based food products. Additionally, results indicate that Malaysian consumers practice sustainable consumption when purchasing palm-oil-based food products.

There is a need for a greater understanding of the importance perceived health benefits have in influencing consumers' consumption of food products containing palm oil in an emerging market such as Malaysia. This research study addresses the gap in existing knowledge.